Maybe home mortgages ought to be left to the banks and thrifts

A new era: Countrywide Financial Corp. grew by selling its mortgages to others. It now plans to act more like a bank.

The last big mortgage debacle, the savings-and-loan crisis, was made mostly in Washington. The S&Ls were required by law to borrow short (via savings deposits) and lend long (via 30-year, fixed-rate mortgages). When that led to big losses in the inflation-racked early 1980s, Congress encouraged thrifts to grow their way out of trouble, in part by financing commercial real estate, with disastrous results.

This year's mortgage crack-up comes with a different story line. It was made not in Washington but in the strip-mall offices of mortgage brokers and on the trading floors of Wall Street. The general rule this time around...